Climate-related Financial Disclosures

GRI 201, 305
HKEX Aspect A2, A3, A4, KPI A3.1, A4.1

In 2015, the Financial Stability Board (“FSB”)³² established the Task Force on Climate-related Financial Disclosures (“TCFD”) to develop voluntary, consistent climate-related financial risk disclosures for use by companies when providing information to investors, lenders, insurers and other stakeholders. In 2017, the TCFD published a set of recommendations for voluntary climate-related financial disclosures that are consistent, comparable, reliable, clear and efficient, and which aim to provide decision-useful information to lenders, insurers and investors.

We recognise the risks and opportunities presented by climate change to our business. In accordance with our Climate Change Policy, we are committed to communicating our management approaches and strategies for climate mitigation, adaptation and resilience to our stakeholders. In 2018, we started to publish climate-related financial disclosures with reference to the recommendations of the TCFD under the four core categories - governance, strategy, risk management, and metrics and targets. In 2020, we completed the climate risk assessment for physical and transition risks and opportunities to our global portfolio. Our disclosures are set forth in the following pages.

Governance

Strategy

Risk Management

Metrics and Targets

Swire Properties’ governance around climate-related risks and opportunities

Our SD Steering Committee is chaired by our Chief Executive. Other members are the Finance Director and five members of our senior management from the development and valuations, human resources and administration, portfolio management and technical services and sustainable development departments. The Chairman of the SD Steering Committee reports relevant SD matters, including climate-related issues, to the Board on a quarterly basis.

The SD Steering Committee meets quarterly and, in accordance with its terms of reference, has the following overall responsibilities related to climate change:

Formulate and review the Company’s SD 2030 Strategy and climate strategy, including approving targets or key initiatives related to climate change mitigation, adaptation and building climate resilience.
Review any significant risks, opportunities and investments regarding climate change, energy/carbon management and low-carbon transition.
Review on an annual basis the performance of the Company in achieving our energy/carbon intensity reduction targets and other climate change- and energy-related KPIs.

The Board provides oversight of our risk management framework and SD risks, including climate-related risks. Our SD agenda and the progress of our SD 2030 Strategy are reported by the SD Steering Committee and discussed at quarterly board meetings. We also conduct regular risk identification and analysis and review management processes throughout the year through the Audit Committee and our ERM System. This includes our Corporate Risk Register in which climate change has been identified as an emerging risk.

Both the Board and the SD Steering Committee have sufficient knowledge of climate-related issues and the impacts of such issues on the company’s business and operations.

The Performance (Environment) Working Group is composed of members with sufficient technical expertise in climate-related issues, is in place to plan and implement different mitigation and adaptation policies and measures, and to facilitate the integration of climate-related issues into business operations.

Our Climate Change Policy guides our management approach and strategy on climate change mitigation, adaptation and resilience. We also support the Business Environment Council’s efforts to develop and promote the Low Carbon Charter for the property and construction sector in Hong Kong.

In 2020, we conducted a materiality review to gather feedback from 570 internal and external stakeholders through qualitative interviews and a quantitative survey. The topics of green building construction and renovation, energy efficiency, decarbonisation, climate adaptation and resilience were identified as material issues to our business continuity and development. These issues align with the focus areas of the Performance (Environment) Pillar of our SD 2030 Strategy.

³²	The FSB is an international body that monitors and makes recommendations about the global financial system.
³³	Net- Zero Emissions by 2050, International Energy Agency (2020), World Energy Outlook 2020, IEA, Paris, https://www.iea.org/reports/world-energy-outlook-2020/achieving-net-zero-emissions-by-2050
³⁴	IIASA NGFS Climate Scenarios Database, REMIND model, Carbon prices shown for the Chinese Mainland under NZ2050 Scenario https://data.ene.iiasa.ac.at/ngfs/#/workspaces/1989
³⁵	Sustainable Development Scenario, International Energy Agency, 2020, Renewables, 2020, Paris https://www.iea.org/fuels-and-technologies/renewables
³⁶	IIASA NGFS Climate Scenarios Database, REMIND model, Carbon prices shown for the Chinese Mainland under Below 2 Degrees Scenario https://data.ene.iiasa.ac.at/ngfs/#/workspaces/1989